New Powers Given to Renters

By BridgePoint-Ventures.com

The government has given new powers to those
that rent property, redressing the balance between
landlords and tenants. Under amendments to the Enterprise and
Regulatory Reform Bill, renters will be given the right to
challenge ‘rogue’ lettings agents, who will be required to sign up
to an approved redress scheme.

It is hoped the changes will put an end to the current practice
of landlords going unchecked and consumers stuck in agreements if
they fall foul of malpractice or unethical behaviour.

Baroness Hayter tabled the amendment and the government believes
it will go some way to ensuring tenants and landlords can better
challenge negligence. It works by directing any unresolved
grievances recorded through the redress scheme to the Ombudsman.
The Royal Institute of Chartered Surveyors (RICS) is among those
that have welcomed the proposals. In a statement, it stressed that
it has long been campaigning for increased regulation in the sector
and the measures are an important first step. However, more can be
done.

The amendments only give consumers power to challenge landlords
after damage has been done. Mechanisms now need to be put in place
to ensure both tenants and landlords are protected throughout a
transaction. This will help to raise standards in the rental market
and RICS claims there is a “very strong business case for better
targeted regulation”.

Peter Bolton-King, RICS residential director, said: “The
lettings market has for far too long been in danger of becoming the
Wild West of property industry. While, clearly, there are good
agents out there, the market has been dogged by poor practice and a
lack of consumer protection.” The amendment means that consumers
can register their grievances and, if appropriate, receive
compensation.

However, increased regulation should not deter investors from
entering the rental market. In fact, throughout the UK it is
continuing to perform strongly. RightMove’s House Price Index
showed the sector is enjoying a period of strong returns and the
lowest ever remortgage finance (around two per cent). Average
rental yields are nearly at six per cent and there is a good
prospect of capital growth.

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